The trillion-dollar grift: the long-term plan for US-China decoupling

Peter Lee 03/09/2019
There is a certain amount of “OMG how did we get here??” handwringing over the escalating trade war between the US and China.

The decoupling strategy of the US China hawks is proceeding as planned. And economic pain is a feature, not a bug.

Below is the script of a Newsbud China Watch episode I did on September 26, 2018, when the outlines of the US strategy were already clear.
Some further comments.
Failure of trade negotiations was pretty much baked in, thanks to Lightizer’s maximalist demands.
And that was fine with the China hawks. 
Because their ultimate goal was to decouple the US & PRC economies, weaken the PRC, and make it more vulnerable to domestic destabilization and global rollback.
If decoupling shaved a few points off global GDP, hurt American businesses, or pushed the world into recession, well that’s the price o’ freedom.
Or at least the cost of IndoPACOM being able to win the d*ck measuring contest in East Asia, which is what this is really all about.
Keeping the negotiations creeping along while encouraging the decoupling dynamic through tariffs & sanctions allowed the China hawks to dodge the onus of hurting the US economy for the sake of US hegemonic goals.
Now, as we’re entering a phase of pretty much open economic warfare, maybe that mask is ready to drop.
One of those items of academic interest is whether Trump was ever interested in a trade deal & return to normalcy. I’m guessing Yes.
But the US military is pretty much Trump’s only solid Beltway constituency. They want a China confrontation & he went along, since the costs of the confrontation in his main political constituency, the stock market, seemed manageable.. 
The continual bait-and-switching on the trade deal (we got a trade deal; oops more tariffs!) is a classic from the Trump playbook: when your opposite number seems ready to deal, it’s time to squeeze harder. 
This was catnip to the China hawks. As long as the negotiations dragged on, the decoupling dynamic could continue pretty much unexamined.
Now maybe we’ve reached the point of no return, since it looks like the PRC has decided it’s more important to signal its capacity to take punishment than its eagerness to make a deal.
Again, a happy day for the China hawks. It’s war! At least economic, for the time being.
Now, if a recession does hit, one can consider it a signal that the US finance/business bunch have priced China out of their economic models.
The next step beyond economic warfare is strategic/military rollback.